Benefits of Investing in an Energy Efficient Home: Financial Gains for Buyers and Sellers

Energy efficient homes are becoming increasingly important. They provide financial benefits for when you want to sell your home, or if you are buying a home. The Sustainable Buildings Research Centre at the University of Wollongong found that houses with energy-saving features can sell for up to 10% more than those with low energy rating. A thermally energy efficient property is mainly judged on its ability to maintain temperature no matter the weather outside. Some banks offer incentives to promote thermally efficient properties, such as a 0.20% per annum interest discount for homes with a 7-star or higher NatHERS rating, as well as green home loans. These energy efficient homes are attractive and cost-effective, with potentially good returns on investment for sellers.


What is an Energy Efficiency Rating? Energy Efficiency Ratings are a system used to assess the minimum energy efficiency requirements of the National Construction Code (NCC). The ratings are converted into 0-10 star rating band.  The higher rating indicating a more energy efficient home and potentially a greater sale price. The ratings are based on forecasted amount of heating and cooling needed for the home.


The good news is, if you have bought, or are living in, an established house with a less than 6 star rating, installing or increasing the insulation of your home may lift its energy efficiency rating.


All new home built in Australia are now required to reach a 7 star rating.  But anecdotally many are still being built well below that rating.  These ratings are now too low for our unpredictable climate in Australia (and it is also illegal). 

The possibility for future home property value of energy efficient homes

The Star Rating meanings shown here are from NaTHERS (Nationwide House Energy Rating Scheme) based on the amount of energy predicted to be used for homes in different locations – the higher the rating the lower the energy usage.

The potential future for Energy Efficient House Prices (subject to a number of economic variables).  The higher the energy efficient rating the potential for higher property value.

A review undertaken by the Sustainable Buildings Research Centre at the University of Wollongong found “houses with energy-saving features attracted noticeably higher prices – up to 10% more.”


Other factors also play a role in House Prices as well such as location, condition, age, size and so on.